UKX FTSE 100 Index

By Sara Sjolin, MarketWatch

European stock markets posted firm gains across the board on Thursday, bolstered by the surprise decision by the Organization of the Petroleum Exporting to work toward cutting oil production.

The Stoxx Europe 600 index jumped 0.8% to 345.20, erasing its monthly loss. The pan-European benchmark is now on track for a 0.7% gain for September, which ends for trading on Friday.

"After years of squabbling self-interest and failure to act as a cohesive collective, the OPEC nations have finally agreed to act as one and move to cut oil production. Financial markets are reacting with improved risk sentiment as the oil price has shot higher," said Richard Perry, analyst at Hantec Markets in a note.

Crude oil jumped 5.3% on Wednesday (http://www.marketwatch.com/story/crude-higher-but-market-faces-long-wait-for-next-opec-move-on-output-2016-09-28), its biggest one-day rise since April, after OPEC members gathering for an informal meeting in Algiers hammered out a plan to cut oil production. The details, however, have yet to de finalized at the cartel's meeting in November, leaving investors worried the prospective deal could flop (http://www.marketwatch.com/story/doubts-linger-over-opecs-preliminary-deal-on-oil-output-2016-09-28).

"Words are easy, now comes the tricky bit of implementing the agreement," Perry said. "Once the dust settles, getting the countries to agree to cut output and actually seeing it done in practice will be difficult."

Oil prices declined on Thursday (http://www.marketwatch.com/story/oil-prices-barely-higher-as-market-wary-over-opec-production-agreement-2016-09-29) as investors digested the OPEC news.

However, the prospect of a production cut was enough to boost oil-related companies in Europe on Thursday. Shares of Saipem SpA (SPM.MI) jumped 8.1%, Amec Foster Wheeler PLC (AMFW.LN) rose 7.7%, and Technip SA (TEC.FR) jumped 7.3%.

Among oil producers, Tullow Oil PLC (TLW.LN) rallied 7.2%, Total SA (TOT)(TOT) put on 4.9%, and Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) added 5.3%.

Other movers: Commerzbank AG (CBK.XE) rose 0.6% after the lender announced plans for a restructuring program. The bank said it will cut 9,600 jobs (http://www.marketwatch.com/story/commerzbank-to-cut-near-10000-jobs-halt-dividend-2016-09-29), add 2,300 new positions and suspend dividends for now to covers the restructuring costs.

Shares of Capita PLC (CPI.LN) sank 28% after the support-services company issued a profit warning (http://www.marketwatch.com/story/capita-warns-on-profit-second-half-below-views-2016-09-29).

Shares of Novo Nordisk AS (NOVO-B.KO) fell 1% after the insulin maker said it will slash around 1,000 jobs (http://www.marketwatch.com/story/novo-nordisk-to-ax-1000-jobs-as-competition-grows-2016-09-29) in a response to increased competition.

Indexes: The U.K.'s commodity-heavy FTSE 100 index rose 1% to 6,919.98, setting it on track for its highest close in six weeks.

Germany's DAX 30 index added 0.9% to 10,535.18, and France's CAC 40 advanced 1.4% to 4,492.69.

Economic news: German jobless claims rose unexpectedly in September (http://www.marketwatch.com/story/german-jobless-claims-rise-unexpectedly-2016-09-29), but the unemployment rate stayed at a record low as demand for labor remained high.

Eurozone business confidence rose in September (http://www.marketwatch.com/story/eurozone-manufacturers-shrug-off-brexit-fears-2016-09-29) to its highest level this year, as manufacturers shrugged off concerns about the impact of the U.K.'s decision to leave the European Union as export orders picked up.

(END) Dow Jones Newswires

September 29, 2016 05:32 ET (09:32 GMT)

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